What Is the Difference Between Mediation and Arbitration?

Another alternative to litigation that people or businesses often employ is mediation. The big difference between mediation and arbitration is that the latter is with a private judge. In other words, he or she is not in our district court, and they weren’t appointed by the governor. A private judge can still enter a judgment against the parties and then have that judgment enforced by the district court. However, mediation is different in the sense that no order or judgment can be entered by him or her. A mediator is basically a private party. Many times a mediator is a retired judge or a former judge, or an experienced attorney, but they don’t necessarily have to be and the parties can agree that they will mediate their dispute with this independent person.

A mediation is also sometimes called a settlement conference. The parties involved in a dispute often will present letters or briefs summarizing the facts of their case, presenting them to the mediator so that the mediator understands the nature of the dispute and who is involved and what’s at stake and so forth. The big difference, however, is that the mediator cannot enter an order binding any of the parties to do anything. In other words, unlike an arbitrator, a mediator can’t say the plaintiff is owed $10,000, for example, and therefore a judgment is entered against the defendant in favor of the plaintiff for $10,000. The mediator can only arm twist or cajole to try to persuade the parties to settle the dispute voluntarily. Often what the mediator does is talk to both parties about the risks of going to court. Those risks are primarily, in a lot of instances, that it’s going to cost you a lot more in attorney’s fees, and it’s going to take longer, and you may not get the result that you were hoping for.

In other words, if you are the plaintiff hoping to get a $10,000 judgment, you might not get that. You might get zero or you might get something less than $10,000. The mediator can’t force people to do anything. He or she can’t just tell the defendant they should pay the $10,000. He or she can suggest it only. The mediator can mention that if they go to court they very well may lose so they might as well pay the $10,000 now. However, there is nothing to compel either party by force of law to do anything. That said, mediation comes along sometimes when the parties are in a lawsuit and they may just agree to have a mediation instead. The parties then pay that mediator privately. If it’s an attorney or an ex-judge, usually they will charge an hourly rate for whatever time they give services to the party or parties.

Another way is that a district court can often order the parties to go to mediation. There is a Colorado statute that allows judges to do that and a lot of times they will. However, the mediator still can’t order the parties to do anything. The court does that with the hope that if the parties are in the same office, in the same place, and they sit down and focus on their dispute for a given period of time, a day, a morning, or an afternoon, or however long it might take, the chances of getting the case resolved or settled to the satisfaction of all parties goes up quite a bit. This will allow the judge to clear his or her calendar in the courtroom of one more case, and the parties will also have more control over whatever type of remedy is fashioned. They will have some input into it as opposed to when you are in court and the judge or jury makes the decision.

In mediation, if the result of it is successful, the case will be resolved, and the parties will sign a settlement agreement or something to that effect. Often, it’s one party paying a certain amount of money to another party and the case gets resolved, and if there is litigation pending the lawsuit gets dismissed thus there is finality and a resolution to it.

Is the Result Of Mediation Or Arbitration Binding?

In arbitration, it usually is because the arbitrator is going to hear evidence and make a decision and that decision is going to be supported by the court; whereas, mediation is not binding in the sense that the parties may go to mediation but not resolve their case.

For more information on Arbitration Vs. Mediation in Colorado, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (303) 870-8492 today.